Regulations proposed for lawsuit lending

AUSTIN — Lawmakers are seeking to rein in lenders who finance lawsuits.

Under a bill considered in the House Committee on the Judiciary and Civil Jurisprudence on Monday, the lenders would have to abide by regulations that already apply to many other kinds of loans.

Like the so-called payday lenders who make short-term loans to working people, lawsuit lenders have gained a national reputation for charging extremely high interest rates.

Republican Rep. Doug Miller of New Braunfels said his bill would protect consumers by making the loans subject to maximum interest rates.

A spokeswoman for a trade association representing the lenders said the restrictions would put lenders out of business in the state. She said he high interest rates are justified because lenders only get paid when the lawsuits succeed.